Energy Profile for Italy Marco Crespi, José Daniel Fasolino February 2016
Content
Introduction Energy Policy Governance Supply Demand Prices Summary: energy balance & indicators, specifics & issues
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| Country Profile Italy
Introduction
Country snapshot in numbers
Indicator
Unit
Year of Estimate
Value
Land area
Thousand sq.km
2014
301.4
Forest area
% of land area
2012
31.6
Population
Millions
2014
60.8
Population density
People per sq.km
2014
201.0
GDP per capita
PPP 2011 $
2014
34,700
Industry value-added
% of GDP
2014
23.5
Inflation
CPI %
2014
0.9
Rents (mineral, oil, coal, gas)
% of GDP
2012
0.2
- 8th country in GPD ranking - a lot of SMEs - strong manufacturing industry 3
| Country Profile Italy
Source: World Bank – World Development Indicators
Introduction
Resources
About 75% of Italy’s energy needs are covered by imports, with small domestic production from gas (9%) and oil (10%).
The consumption of energy constantly grew until 2005; since then a decrease
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| Country Profile Italy
Source: MISE, Situazione Energetica Nazionale 2014
Introduction
Resources
From under-capacity to over-capacity • Electricity companies mostly reliant on CCGT suffer from high over-capacity in electricity generation; (all the Italian power plants can provide with 130GW, but the real need is about 45/50 GW)
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| Country Profile Italy
Source: MISE, Situazione Energetica Nazionale 2014 Article on Affari & Finanza, Jan. 11th, 2016
Introduction
Resources
The current energy mix, in particular for electricity, is fairly costly
Italy has high environmental standards, being one of the world’s most energy-efficient countries, with primary energy intensity 14% lower than the European average in 2010 • However, the energy efficiency of the building park in Italy is very low: it is generally old
6
| Country Profile Italy
Source: World Energy Resources – 2013 Survey
Introduction
Wind and Solar resources
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| Country Profile Italy
Energy Policy
National energy plan: targets
The National Energy Strategy (“Strategia Energetica Nazionale”) has set the choices of energy policies for Italy and established four main targets in medium term (2020), even taking into account the very long term (2050):
8
•
Competitiveness: to significantly reduce energy cost gaps, bringing energy costs and prices in line with European levels by 2020
•
Environment: to meet and surpass the European environmental and decarbonisation targets, exceeding the targets set by the Climate-Energy Package (’20-20-20’).
•
Security: to improve security and independence of energy supply, in both electricity and gas sectors
•
Growth: to foster a sustainable economic growth.
| Country Profile Italy
Energy Policy
National energy plan - Priorities To achieve the 2020 objectives, the strategy has been structured according to 7 priorities: 1. Energy efficiency, which contributes to the achievement of all energy policy targets, absorbing a substantial portion of expected increases in energy demand 2. Competitive gas market and Gas Hub for Southern Europe, which would help Italy become a country of exchange and transit to northern Europe - This could allow the CCGT fleet to become competitive again 3. Sustainable development of renewable energy to go beyond the 2020 production objectives. 4. Development of electricity infrastructure and the electricity market 5. Restructuring the refining industry and the fuel distribution sector 6. Sustainable production of domestic hydrocarbons (with no impact on environment; no shale oil/gas ) 7. Modernization of the systems governance (shorter time and more efficiency in taking decision) 9
| Country Profile Italy
Energy Policy
National energy plan - Highlights
The results expected by 2020 are as follows: •
Save 15.5 Mtoe of final energy per annum (20 Mtoe of primary energy)
•
19-20% share of renewable energy in gross final consumption,
•
Reduction from 86% to 76% of fossil fuels on primary energy consumption
•
Renewables exceed the levels of gas as energy source in electricity generation, 3538%
•
Significant reduction of energy costs and a gradual alignment of European wholesale prices
•
Reduction of greenhouse gas emissions by 21%
•
Reduction from 84% to 67% of energy dependence from abroad
•
Positive impact on economic growth thanks to major investments expected in the sector (170-180 Bn€ invested by 2020)
10 | Country Profile Italy
Energy Policy
Renewable Energy
Following European 2020 objectives, Italy must accomplish a quota of 17% of energy from renewables, 20% increase in energy efficiency and 18% reduction of greenhouse gas emissions.
Renewable energy, quota reached in 2014: 17,1%
11 | Country Profile Italy
Source: GSE- Rapporto statistico Energia da fonti rinnovabili 2014
Energy Policy
Renewable Energy Electricity from RE Source
Heating from RE
TWh
Source
Mtoe
Hydro
58.5
Solar
0.180
Wind
15.2
Biogas
0,283
Solar
22.3
Solid biomass+ waste
6,731
Geothermic
5.9
Other
0.163
Bioenergy
18.7
Heat pumps (heating, not conditioning)
2.579
Total
9.934
Total
12 | Country Profile Italy
120.7 (= 10,376 Mtoe)
Source: GSE- Rapporto statistico Energia da fonti rinnovabili 2014
Energy Policy
Renewable Energy
There were two instruments that promoted renewable energies in electricity generation (these two mechanisms are no longer available for new installations) •
Feed-in-Tariff (FiT): as in many other countries, this policy mechanism is designed to accelerate investment in renewable energies by providing a fee which is above retail electricity prices - 20 years of FiT for PV - Decree in 2014 : the amount of those FiT will be payable in longer period.
•
Green certificates (GCs): all producers and importers of non-renewable have to inject a minimum quota of renewable electricity into the power system every year. - Each GC is conventionally worth 1 MWh of renewable electricity and is valid for three years
In Italy, support schemes for RES are managed by ‘Gestore dei Servizi Energetici’ or GSE (Manager of Electricity services), a state owned company
13 | Country Profile Italy
Energy Policy
Renewable Energy
Grid operators are obliged to give priority access to renewable plants. Favorable tax conditions are currently in place for the promotion of RES for heating •
For example, detractions for installation of solar collectors
District heating and cooling networks are managed at local level •
According to Law 102/2014 about energy efficiency, GSE must assess the feasibility of district heating.
Biofuels should reach the 10% share of fuel consumption by 2020
14 | Country Profile Italy
Energy Policy
Energy Efficiency in N.E.S.
In order to improve the energy efficiency, it is important to keep and strengthen the existing initiative to foster E.E., like the tax detractions, white certificates and incentives (“Conto Termico”). • Better energy performances for new buildings • Tax detractions • Incentives (like “Conto termico”, for private and public properties) • White certificates (for distributors of electricity and gas having 50,000+ clients): 1.7 Mtoe saved in 2015
15 | Country Profile Italy
Energy Policy
Electricity The electricity market in Italy was liberalised following objectives of Directive 96/92/EC after almost 40 years of state nationalisation Distribution and supply activities must be unbundled Generation: • 2014: The main companies involved in electricity generation are Enel (27.2%), Eni (8.3%) and Edison (6.0%). Top10 generate about 60%. • AssoElettrica is the association: 120 companies (90% of the market)
Transmission + dispatching: • Terna – Rete Elettrica Nazionale SpA, is the transmission system operator (TSO). It is the owner of the majority of the transmission grid operation line and holds the concession agreement to operate the system. 16 | Country Profile Italy
Energy Policy
Nuclear
The civil nuclear program was abandoned in 1987, after a referendum. It followed the growing anti-nuclear sentiment of people in the 70s and the Chernobyl accident in 1986. In the 2000s, the government tried to restart the nuclear program, but it renounced after a second referendum in 2011. Italy imports electricity produced to nuclear power in France, Switzerland and Slovenia
17 | Country Profile Italy
Energy Policy
Climate
The domestic GHG emissions has been declining since the second half of the 2000s. Several factors contributed to this fact, such as: •
A switch from oil to natural gas
•
Increased use of renewable energy sources
•
Improvement of energy efficiency
•
The economic crisis
18 | Country Profile Italy
year
MT Co2 equiv.
1990
525.3
1995
538.4
2000
561.8
2005
587.4
2010
516.0
2013
446.6
Source: Eurostat
Governance
Institutions
• The ‘Ministero dello Sviluppo Economico / Settore Energia’ (MiSE) is the Ministry of Economic Development, which manages the security of supply and energy infrastructure, mineral resources, RES, EE, among others • The ‘Autorità per l’energia elettrica e il gas e sistema idrico’ (AEEGSI) is the electricity and gas authority, which sets tariffs, establishes guidelines for production and distribution services, among others • The ‘Gestore dei Mercati Energetici’ (GME) is the Electricity Market Operator, being responsible for the economic management of the electricity market, environmental markets, day ahead markets, among others • The ‘Gestore dei Serivizi Energetici’ (GSE) is the Electricity Service Operator, which is responsible for support of renewable electricity, purchase of electricity from producers and resale in the market, promotion of renewables, among others
19 | Country Profile Italy
Supply
Overview
Total primary energy supply (TPES) and energy independence 200.000
40%
180.000
35%
160.000 30% 140.000 120.000
25%
100.000
20%
80.000
15%
60.000 10% 40.000 20.000
5%
0
0% 1960
1970
1980 Production
20 | Country Profile Italy
1990
2000
TPES
2010
2011
2012
2013
Energy independence
Source: IEA Energy Balances of OECD Countries
Supply
Energy balance sheet Source
MToe
%
Trend
Gas
50.70
30.5
Petroleum
57.30
34.5
↓
Renewable energies
35.34
21.2
↑
Solid fuels
13.47
8.1
9.61
5.8
0
0
Electricity (import- export) Nuclear Total (gross domestic consumpion)
166.43
↓
Comparison: • 2014: Oil+Gas+ Solids represent 73.1% • 2004: Oil+Gas+ Solids represent 87.3% 21 | Country Profile Italy
Source: Autorità per Energia Elettrica Gas e Sistema idrico
Supply
Electricity Electricity consumption in TWh
Electricity production by source Hydro
400 8% 350
2% 19%
Coal
5%
300
Oil
5% 250 6%
200
Gas
150
Biomass and waste
100
Wind 17%
50
Solar 0 1970
1990
2010
2012
2014
38%
Geothermal
Production of electricity from RES: 2013: 38.6% - 2014: 43.1% 22 | Country Profile Italy
Source: ENERDATA – Global Energy & CO2 Data
Supply
Electricity Power capacity by source
Electricity production by source
Hydro 1% 14%
8%
18%
Coal Oil
7%
6%
Hydro
2% 19%
Oil
5%
Gas
6%
2% Biomass and waste Wind 7% Solar 45%
23 |
Coal
5%
Gas Biomass and waste Wind
17%
Geothermal
Solar 38%
Geothermal
Production of electricity from RES: 2013: 38.6% - 2014: 43.1% Country Profile Italy Source: ENERDATA – Global Energy & CO2 Data
Supply
Interconnectors (electricity)
Italy has interconnection capacity with 6 countries: Switzerland, France, Greece, Slovenia, Austria and Malta Italian electricity imports represented more about 15% of total consumption in 2014 (46 TWh ; 100%=309TWh) Terna is developing projects for new submarine interconnections in the Balkan area • A new connection with Montenegro will represent the first 1,000 MW electricity bridge with the Balkan area • Several studies are being developed for new submarine interconnections with Tunisia, Croatia and Albania
24 | Country Profile Italy
Supply
Gas
Gas: import covers about 90% of italian gas need. Algeria (12%), Russia (46%), Libya (11%) and Netherlands (7%) are the main sources of gas import from ducts (2014). LNG is shipped from Qatar (7%); Italy has 3 regassification units. The trend is a slow decline in the use of the gas: the peak was reached in 2005 (71 Mtoe, while in 2014 it was 50,7 Mtoe) The main italian producer is ENI (85%). Italy has nearly 14 BCM of gas storage capacity
Source: MISE: Situazione energetica nazionale 2014 25 | Country Profile Italy
Supply
Interconnectors (gas)
May Italy become the gas hub for the southern Europe? “South stream” and “Galsi” (Algeria-Sardinia) projects have been delayed (canceled ?). Trans Adriatic Pipeline (TAP): Greece- Albania- Italy (from Caspian Sea) is expected to start in 2016 and should be completed in 2020 Snam Rete is investing in the Po Valley gas infrastructures and developing a reverse flow project towards north-east. • This would make possible to export gas to France and Switzerland
Snam Rete is also developing a South-North project to increase flexibility
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Supply
Oil
The consumption of oil is decreasing and will keep decreasing: in 2000 it covered 49.5% of need (92.03 MToe ), now it is 35% (57.27 MToe) Crude oil: exporter countries: • Azerbaijan (17.1%) • Russia (15.9%) • Iraq (11.8%) • Saudi Arabia (10.9%) • Kazakhstan (8,3%) • Libya (7.8%) Others: 29.2% 27 | Country Profile Italy
Source: Ministero Sviluppo Economico (graph. : Ministero Sviluppo Economico, elaborazione fabiodiscolzi.com)
Demand
Overview
Energy consumption, Mtoe
Energy consumption by sector
140 2% 14%
120
25% 100
Industry Transport
80
Residential
60
Services
40
Agriculture 27%
20
32% 0 1960 1970 1980 1990 2000 2010 2011 2012
28 | Country Profile Italy
Source: IEA Energy Balances of OECD Countries
Demand
Industry Electricity and natural gas are the main consumption sources Industry energy consumption by source 9%
2%
9%
11%
Coal Oil Gas Electricity Heat
37%
Biofuels & waste
32%
29 | Country Profile Italy
Source: IEA Energy Balances of OECD Countries
Demand
Transport Oil is the most important source of consumption in the transport sector Energy consumption characterization in transport 3%
4%
2%
Oil Gas Electricity Biofuel and waste
91% 30 | Country Profile Italy
Source: IEA Energy Balances of OECD Countries
Demand
Services Electricity and gas are the main consumptions in the service sector Service sector energy characterization 0% 1%
4%
Oil Gas 49%
Electricity 46%
Biofuel and waste Heat
31 | Country Profile Italy
Source: IEA Energy Balances of OECD Countries
Demand
Residential Electricity and gas are the main consumption sources Energy consumption characterization in residential 2% 12%
0%
9%
Solids Oil 19%
Gas Electricity Biofuel and waste Heat
58%
32 | Country Profile Italy
Source: IEA Energy Balances of OECD Countries
Prices
National Energy Bill (B€)
Fuel
Industry
Transport
Households & Services
Total
Coal
0
-
-
0
Oil
2
60
7
69
Gas
4
-
19
23
Electricity
28
-
35
63
Heat
2
-
1
3
Total
35
60
63
158
33 | Country Profile Italy
Prices
Electricity prices w.r.t. neighbours
Constant price in US$cents05 of electricity in industry (taxes incl.) Unit
1980
2013
2014
Unit
1980
2013
2014
Belgium
USc05/kWh
11.1
10.1
9.9
Z-score
0.1
0.3
0.1
France
USc05/kWh
11.5
10.0
9.9
Z-score
0.2
0.3
0.1
Germany
USc05/kWh
11.5
13.9
14.8
Z-score
0.2
1.2
1.2
Italy
USc05/kWh
14.6
25.6
25.9
Z-score
0.8
4.0
3.8
Spain
USc05/kWh
9,92
13,09
14,26
Z-score
-0,12
1,05
1,09
Switzerland
USc05/kWh
13.4
9.5
9.5
Z-score
0.6
0.2
0.0
34 | Country Profile Italy
Source: ENERDATA – Global Energy & CO2 Data
Prices
Gas prices w.r.t. neighbours
Constant price in US$05 of natural gas in industry (taxes incl.) GCV Unit
1980
2013
2014
Unit
1980
2013
2014
Belgium
USc05/kWh
2.5
3.9
3.3
Z-score
-0.4
0.1
-0.2
France
USc05/kWh
2.9
4.3
4.1
Z-score
-0.3
0.4
0.3
Germany
USc05/kWh
2.7
4.1
3.8
Z-score
-0.3
0.2
0.2
Italy
USc05/kWh
3.3
4.2
4.0
Z-score
-0.1
0.3
0.3
Spain
USc05/kWh
4,26
3,56
3,55
Z-score
0,15
-0,03
-0,01
Switzerland
USc05/kWh
5.0
5.2
5.2
Z-score
0.4
0.8
1.0
35 | Country Profile Italy
Source: ENERDATA – Global Energy & CO2 Data
Prices
Taxes
Oil: 55% taxes in end-consumer prices • 57% of taxes for the transport sector (56% on diesel and 60% on gasoline) • 15% for industry • 44% for household and services
Electricity: 38% • 40% of taxes for the industry • 37% for household and services
Gas: 27% tax • 21% of taxes for the industry • 28% for household and services
Renewable electricity fees: A3 component • Up to 6.51 c€/kWh
36 | Country Profile Italy
Source: ENERDATA – Energy and tax bill
Summary
Simplified Energy Balance
Mtoe Primary Production
1997
2000
2005
2009
2010
2011
2012
2013
2014
33.37
31.04
29.43
30.31
33.89
35.47
37.54
43,82
45,04
Imports
161.11
181.56
197.39
175.44
185.26
175.73
168.63
154,11
143.79
Exports
21.15
21.60
29.67
27.08
30.11
27.57
30.48
24,96
21.26
Stock changes
-1.08
5.10
-0.63
-1.67
1,26
-0.58
-0.62
-0.02
1.15
Gross inland consumption
174.41
185.90
197.77
180.34
187.79
184.20
176.31
172.99
166.43
Available for final consumption
127.66
134.84
146.59
132.71
138.58
134.90
127.86
126.59
120.80
• Industry
37.21
40.18
41.06
29.26
32,15
32.66
30.19
28.18
27.71
• Transport
38.87
41.51
43.96
42.50
42.42
42.47
38.56
37.82
39.09
• Residential + service
37.53
39.70
47.06
46.37
49.13
46.45
46.89
49.51
44.23
3.20
3.23
3.40
3.29
3.04
3.01
2.78
2.74
2.69
8.445
7.50
7.68
7.22
8,39
6.90
6.49
5.91
4.78
2.40
2.70
3.42
3.37
3.47
3.41
2.96
2.43
2.30
Efficiency of transformation
73,2%
72,5%
74.1%
73.5%
73.7%
73.2%
72.5%
73.1%
72.5%
Energy independence
19.1%
16.7%
14.9%
16.8%
18,0%
19.2%
21.3%
25.3%
27.0%
• Agriculture • Non-energy uses • Bunkers
37 | Country Profile Italy
Source: Ministero dello Sviluppo Economico – DGSAIE – Statistiche e analisi energetiche e minerarie
Country Comparison on Energy use from 1960 to 2012 (ktoe)
38 | Country Profile Italy
Summary
Extended Energy Balance
ktoe Primary Production
Solids
Oil
RES
Gas
Biomass
Nuclear
Electricity Total
51
5,629
7,046
11,487
7,641
0
0
31,885
Imports
15,978
85,421
55,451
0
2,807
0
3,905
163,562
Exports
-213
-30,379
-114
0
-56
0
-198
-30,959
0
-5,568
0
0
0
0
0
-5,568
483
443
-1,045
0
30
0
0
-89
Gross inland consumption
16,299
55,547
61,338
11,487
10,421
0
3,707
158,800
Available for consumption
2,608
49,502
35,811
273
5,499
0
25,520
122,645
Industry
2,464
3,268
9,040
10
465
0
10,348
28,178
Transport
0
33,170
886
0
1,368
0
925
36,349
Services
0
633
7,274
98
46
0
7,764
31,325
Residential
3
2,809
18,111
117
3,619
0
5,973
15,930
Agriculture
0
1,961
129
18
2
0
501
2,625
141
7,369
371
0
0
0
0
7,880
Bunkers Stock changes
Non-energy uses
39 | Country Profile Italy
Source: IEA Energy Balances of OECD Countries
Summary
Specifics
Some controversial matters about big infrastructures: • Electric interconnector from Montenegro • Gas duct from Algeria (GALSI project) The “Unlock Italy” make the drilling for oil and gas easier. A referendum will be held in April, in order to limit the the duration of drilling concessions.
40 | Country Profile Italy
Summary
Issues
Source of energy: • No nuclear energy • Sistem overcapacity: a lot of CCGT plants will be closed or be run at minumum load • There is a continuous decreasing consumption of oil; its importance is being taken by gas • Renewables are becoming more and more important, even if the “boom” of the last years should not be experineced again. • Italy should not become the european hub for gas. Energy efficiency: italy is promoting energy efficiency through a lot of initiative, like White Certificates. Please note that at local lever the situation differs from place to place, especially about the Building Code. 41 | Country Profile Italy
Sources
Macroeconomic indicators: http://databank.worldbank.org Energy Balances: Eurostat, IEA, Enerdata Energy Prices: Eurostat, Enerdata Country Report, Global Energy Research (Enerdata) Country Report, www.reegle.info European Commission: Progress towards completing the IEM World Energy Council: World Energy Resources 2013 Survey American Council for an Energy Efficiency Economy: “2014 International Energy Efficiency Scorecard”
42 | Country Profile Italy
Sources (in Italian)
Ministero dello Sviluppo economico: “Bilancio Energetico Nazionale” GSE: “Rapporto statistico - Energia da fonti rinnovabili 2014” (Dec. 2015). Ministero dello Sviluppo Economico: “Situazione energetica nazionale nel 2014”, (July 2015) Ministero dello Sviluppo Economico: “Strategia energetica Nazionale” (Mar.2013)
43 | Country Profile Italy
Thank you For more information please contact:
[email protected] [email protected] [email protected] [email protected]
44 | Country Profile France
